Democratic House Speaker Nancy Pelosi was a bit tougher, sticking firm to higher taxes for those making over $250,000.

The rally may come on a directive from the Internal Revenue Service: Several traders mentioned last week that the call to buy on a fiscal cliff resolution would come, not from Congress, but from the IRS. That's because several sources (including Potomac Research's Greg Valliere) noted that, should a deal appear likely, the IRS would issue a directive to companies not to change the withholding rates for taxes (the top 2 percent excepted).

One thing's for sure: "Keep your book light" is the mantra for many. For example, a lot of traders hold long and short books. You might be 60 percent long, and trade the other 40 percent. Much of that part of traders' portfolios is in cash right now.

Elsewhere:

1) How much business will the home building industry see from Sandy? Already, companies are downplaying it. The chief financial officer of USG on the conference call last Wednesday, surprisingly said, "We don't expect any kind of material impact from Sandy" other than a "little bit positive" to the bottom line. Some of this is clearly being politically sensitive ... the CFO said "we just don't like to profiteer on any kind of disaster or anything."

One thing's for sure: Prices for sheet rock, insulation, dry wall, and lumber will go up, not just because of Sandy, but because capacity has been so constrained. The producers are holding back ramping up until they see really convincing signs that the home building business has rebounded. Some firms (Louisiana Pacific ) have already indicated they wanted to see housing starts over 1 million before they ramp up production. We are at about 872,000 starts last month.

We'll see October housing starts and building permits tomorrow ... expecting a 3.3 percent decline from September. One important point about super storm Sandy: The data for starts is collected in the first two weeks of October, so it will likely exclude the effects of the storm — look for signs of impact in November. The Northeast accounts for about 13 percent of housing starts nationwide.

2) Euro zone finance ministers are meeting tomorrow; final details of the next tranche of Greek aid are supposed to be decided. The big issue is the Greeks are asking for a two-year extension to reach their fiscal targets, but that would require even more money and there is little appetite for it.

3) Credit card debt increasing. TransUnion said the average credit card debt per borrower in the U.S. grew 4.9 percent in the third quarter compared to the same period last year. Keep an eye on defaults!

4) Lowe's is set to open at a five-and-a-half-year high, rising 5.7 percent pre-market, after the home improvement retailer beat on the top and bottom line. Lowe's reported third-quarter earnings per share of $0.40, five cents higher than analysts' estimates. The company also reported better-than-expected third-quarter same-store sales of 1.8 percent and lifted its sales estimates for 2012, anticipating same-store sales growth of about one percent. The do-it-yourself retailer and its larger rival Home Depot both benefited from sales spurred by Sandy. HD reported better-than-expected third-quarter earnings and revenues last week, propelling the stock to a 12-year high.